WealthManagement Magazine

Former Edward Jones Brokers Complain of Big Brother Treatment

Is Big Brother watching you?Some former and current Edward Jones reps say the firm does exactly that.From its main terminal in St. Louis, Edward Jones has the ability to monitor everything entered into a broker's terminal, including electronic calendar appointments, client and prospect notes, and intranet "wire" communications. While most reps believe this is par for the course of doing business as

Is Big Brother watching you?

Some former and current Edward Jones reps say the firm does exactly that.

>From its main terminal in St. Louis, Edward Jones has the ability to monitor everything entered into a broker's terminal, including electronic calendar appointments, client and prospect notes, and intranet "wire" communications. While most reps believe this is par for the course of doing business as a one-rep per office operation, others believe the firm has used the information to bully them and even force their resignation.

Phil Taylor, a former Jones rep and former Episcopal minister in Smithfield, N.C., has said the firm became aware of an evening religious class he taught in his office by monitoring his electronic calendar. Taylor told this magazine he was asked to resign because of this, and has since filed an arbitration against the firm alleging religious discrimination and defamation. The case is still pending (see RR, September '97).

Chris Palladino worked at Jones for eight years in Kannapolis, N.C. He says the firm constantly pressured him to put contact-management information on the firm's network when the system was introduced three years ago. He balked, opting to use Broker's Ally on his own PC.

"My attitude was, if I chose to leave, I wanted to simply switch off the computer and walk out the door with my notes," Palladino says, adding that the company system does not allow any information to be downloaded to a floppy disk and even triggers an alarm at firm headquarters if printed. "You're locked in-I wasn't willing to give the firm control of every note on every client for eight years-not only clients, but prospects."

Palladino says his refusal to cooperate put him on a watch list. He claims he received the boot last March when the firm apparently monitored a wire sent to him from another Jones broker. He says the wire, on the company's intranet, discussed their plans to fly to Boston to interview with Linsco/Private Ledger. "I wasn't unhappy with Jones," he says. "I just wanted a higher payout and was ready to expand and be more of an entrepreneur, hiring folks underneath me."

Now with L/PL, Palladino claims the timing of his firing was not coincidental.

"The day he wired me discussing the plane trip to Boston, was the day I got fired," Palladino says. "Several days later, my friend was audited."

An Edward Jones spokesperson denies that Palladino was fired because of the wire. "Palladino was asked to resign for violating a law specified in his U-5 form," she says.

Palladino acknowledges that he had run an outside real estate practice on the evenings and weekends, says he had written permission from Edward Jones, and that this was the official reason the firm gave him for his firing-that he was spending too much time on anoutside business. He insists, however, that the firm wanted to run him out for his lack of cooperation with the "Big Brother" system.

"We kidded all the time about 'Big Brother' amongst the brokers," Palladino says. "I did not use the firm's electronic calendar for that reason entirely. I was on their bad boy list for not going to regional meetings and not switching data over to their system."

Other Jones brokers, however, say the peculiarities of running one-rep offices justify the firm's apparent intrusion and close monitoring.

"It smacks of 'Big Brother' when you hear about it," admits one Jones broker in the Midwest. "But you've got to realize, it's not your personal equipment. Maybe we're spoiled because we're so autonomous in our one-man office. We think it's our computer-but it's not. Jones allows me to run my business as long as it's ethical and profitable."

Other brokers believe close monitoring keeps bad apples out and has little effect on brokers who are honest. "I'm glad they spy on us," says one Jones broker in Southern California. "If I'm using company equipment, they have a right to look at anything I put on there. ... Anyone who says differently is a jerk."

As for the firm, it says it doesn't have the resources to monitor every piece of information on the computer terminals of its more than 3,500 reps. It does, however, closely watch all new accounts, all trading activity and all customer correspondence via various methods for regulatory purposes and "to ensure the protection of our customers."

Edward Jones says it permits brokers to have separate PCs or laptops in their offices but discourages them from doing so.

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